I'm getting similar behavior, though not quite the same.
Attempting a NAND backup, I get the green progress bar along the bottom. It get's to 100% in about two minutes, but then hangs there for over a half hour.
The center of the direction button will take me back to the diagnostic screen, which I'm not sure how to exit. After a reset, the card has the syst0006.dbk file weighing in at 66.2 MB.
Maybe it's fine, but without a normal exit I'm not interested in wiping my ROM to see if the backup restores ok.
I'm using a 256 MB PNY Technologies (purportedly Panasonic) CF card on the Zaurus 6000L. ROM is the Sharp original (which I'm working on backing up before messing with other options). I did fdisk and mkfs an msdos FAT partition on the card. It was completely empty except for the /QtPalmtop and /Documents folders installed automatically when it was mounted in Qtopia.
The first time I tried NAND I forgot to stop the Apache and MySQL daemons, but the second time was straight from a reset so the memory was clear.
... this thread probably belongs in another topic